Important Announcement

MMT began a hiatus from some grantmaking on March 15, suspending our Responsive Grants and Grassroots Grants programs to reorganize our grantmaking into priority focus areas over the next eight or nine months. We will no longer award grants to organizations for work done in Clark County, Wash., but have dedicated $1.5 million to the Community Foundation for Southwest Washington in support of its community grantmaking.

Related Blog Entries

A few months ago, we reached out to ask for community input as part of a strategic review of our program related investing conducted by third party GPS Capital. Over 230 partners completed a survey and/or interview, providing valuable perspectives about opportunities and capital needs statewide that support MMT’s vision of a flourishing and equitable Oregon. Read More

Program Related Investment Guidelines

Program Related Investments (PRIs) are different from grants. PRIs take the form of low cost loans, loan guarantees and equity investments to support a charitable project or activity. Because PRIs are paid back, the funds are recycled to further MMT's charitable purpose. Historically, the bulk of MMT's PRIs have been loans. For April 2013-March 2015, the interest rate is 1.75% simple interest.

PRIs help extend the reach of MMT's grantmaking by providing organizations with less expensive capital to finance new programs or projects, or for the expansion or enhancement of existing ones. They also help agencies attract new financing from mainstream banks and other funders, or build a credit record to qualify for commercial financing. PRIs frequently help build financial management capacity of agencies.

Program Related Investments fund a wide variety of projects in many
fields of activity, including but not limited to affordable housing,
community development, cultural organizations, disaster relief, economic development
including entrepreneurship and micro-business, social services, open
spaces and wildlife habitat protection. Recipients have used PRIs as
bridge loans and loan guarantees to acquire
property, construct facilities, reach scale, create jobs, develop products or
services or approach self-sufficiency through earned income strategies.

There is no defined minimum or maximum amount that a PRI seeker may
request. Historically, amounts have ranged in size
from $75,000 to $4,000,000. The bulk of MMT's PRIs have ranged from
$100,000 to $500,000. Proposals should be strategic, reflect the
organization's mission and capabilities and include clear outcomes and a
credible plan for repayment. Applicants are advised to visit our Help Desk and to read Frequently Asked Questions and see What We Look For in PRIs. In addition, it might be useful to see a list of PRIs we've funded in the past in our Awards Database.

In reviewing PRI applications, we use many of the criteria of our Responsive Grants program. In addition, we spend considerable
time reviewing:

The PRI's alignment with the organization's overall strategic or business plan

The organization's financial strength

If the board and staff have proven skills in managing debt and cash

The suitability of a PRI as a financing tool for the project

The PRI's ability to leverage other sources of capital

Multi-year income and expense projections indicating that the PRI can be repaid

Sources of collateral and secondary sources of repayment

MMT Program Related Investments are not used for:

Direct grants, scholarships, or loans to individuals

Endowments

General fund drives, annual appeals, special events, or sponsorships

Elimination of operating deficits

Projects of sectarian or religious organizations that principally benefit their own members or adherents

Direct replacement funding for activities previously supported by federal, state, or local public sources

Animal welfare organizations

Animal-assisted therapy

Projects
that primarily benefit students of a single K-12 school, other than an
independent alternative school serving low-income and/or special needs
populations

MMT funds cannot be earmarked for purposes of
influencing legislation, and the grantee cannot expend any part of the
grant in a way that violates its tax-exempt status

It is important for PRI applicants to understand that because the PRI is a loan, there is a promissory note with covenants requiring your organization to maintain administrative, program and fiscal stability. Should MMT request a full proposal from your organization, we would discuss these requirements in detail as part of our due diligence.

PRI applications go through a two-step process. Applicants first submit an Initial Inquiry, then those that are approved for further study are invited to submit a Full Proposal.

Inquiry

Initial Inquiries for the PRI program are accepted at any time. When we receive an Initial Inquiry for a PRI, we follow up with an email requesting additional financial information to help determine an organization's financial strength using this form.

Inquiries received by the 15th of each month are batched together and presented to trustees for first review at the program meeting two months later. (For example, an Initial Inquiry received by Oct. 15 would be reviewed by staff in November and presented to trustees for an initial decision at the December meeting.)

Applicants will be notified by email of the decision about their Initial Inquiry soon after this meeting. Applicants can also check on the status of their proposal at any time by logging into their account in GrantIS.

Invited Proposal

Applicants that are invited to submit full proposals generally have four weeks to submit a full proposal. Review, site visit and analysis of a full proposal usually takes three to four more months. Decisions on full proposals for PRIs (other than capital grant applications requesting more than $200,000) are made every month except for January, April and August. Therefore, applicants should submit Initial Inquiries at least five to seven months before the month they want a final decision. It might be useful to consult MMT's event calendar to determine the best time to submit an Initial Inquiry.

Applicants who submit full proposals will be notified of the trustees' decision as soon as possible after the program meeting, usually by phone. Applicants can also check on the status of their proposal at any time by logging into their account in GrantIS.

MMT uses GrantIS, an online application and grants management
system it developed, for applications to this program.

The
step-by-step instructions for using GrantIS to apply for a Program Related Investment are
listed below.

Step 1

Register your organization with MMT.

Verify that your organization meets MMT's eligibility requirements.

If you have not already registered your organization with MMT, go to
the registration form, where you will supply your organization name,
contact email address, requested password, and EIN. (The EIN or Employer
Identification Number, also known as the Federal Tax Identification
Number, is assigned to your organization by the Internal Revenue
Service. It is the nine-digit number found on your tax-exemption letter
from the IRS.)

MMT will confirm your registration and issue you a username, usually
within two business days. SAVE your username and password. You will use
your username and password to access GrantIS for all future
applications.

Step 3

Complete and submit the online Program Related Investment Initial Inquiry in the
"Submit an Application" section of GrantIS. The Initial Inquiry
questions are shown below. Initial Inquiries are limited to a total of
1,500 words; applicants determine how to allocate the 1,500 words among
the four questions.

Organization Information

1a. Summarize your organization, its purpose, history, and major
programs and activities. Provide the number, ethnicity, age, income
levels, and geographic area of the people you serve.

1c. Has your organization experienced an operating deficit in any
of the last three years? If yes, please explain. If not, please type
"not applicable."

Project Information

2a. Summarize the project for which funds are requested.
Briefly explain the need for the project in the local context, why your
organization decided to address it as you propose, and your expected
outcomes.

2b. What counties will your project serve and/or take place in?

Budget

3a. Provide a summary overview of the project budget. Briefly
describe the project expenditures and the sources and amounts of
committed and projected revenue. Indicate the amount requested from MMT
and how funds would be expended over time. (If your organization is
invited to submit a full proposal, you will have an opportunity to
submit detailed budget information. Please do not include tables and
charts here, as formatted data will not display properly.)

3b. If you are requesting a Program Related Investment (PRI),
please provide the following information: the loan duration, securitization opportunities, and repayment
strategies (preferably primary and secondary strategies).

Future Costs

4. Briefly explain how the project will be sustained after the
grant period ends.

There are no deadlines for Initial Inquiries. Initial Inquiries are
received continuously and reviewed monthly. Applicants who submit
Initial Inquiries by the 15th of the month will generally be notified by
email within 60 days whether or not they are invited to submit a full
proposal. Notification of approval or decline of a Full Proposal
generally takes three to four more months.

Step 4

Applicants invited to submit a Full Proposal generally will have six weeks from
the date of invitation to complete the online Full Proposal
application, which asks the questions listed below. While there is no
word limit for a Full Proposal, applicants are encouraged to be concise,
and to use quantitative, as well as qualitative, information to help us
understand your organization and proposal.

Explain the need for the project, and why it is important. If
appropriate, comment on past or present attempts by the applicant and
others to address this need.

Describe the project, including its goals and specific
objectives. Explain how the project will be implemented over time.
Explain why your organization decided to address it as you propose.

Describe the people, groups and/or places expected to benefit
from the project, and the ways they would benefit. Include demographic
information (e.g., number, ethnicity, age, income levels, geographic
area, etc.) for beneficiaries.
Outline the effects of the proposed project by providing a series of
"before" and "after" snapshots in the spaces provided. In each box on
the left, briefly summarize existing conditions for that category. On
the right, briefly describe the changed circumstances you anticipate
after the grant period has ended. Please give specific numbers and
projections where appropriate. If a category does not apply, write NA.

Effect
on organization size, FTE, structure

Effect on organization's
programs

Effect on organization's operating expenses

Effect
on organization's ability to generate income

Effect on the
issue or need the project addresses

Describe how
the project's effectiveness will be determined.

Describe the
qualifications of up to three people with primary responsibility for
implementing the project.

Applicants are also asked to include a
fiscal year budget and a detailed project budget. If requesting
multi-year funding, the project budget should include projected revenue
and expenses covering all MMT grant years, plus one additional year
without MMT funding.

Morrison Child and Family Services is the largest and longest-running children’s mental health agency in Oregon serving low-income families coping with adversity and trauma. Over the past several years funding has not kept up with the cost of doing business and we found ourselves leaving no stone unturned to improve efficiencies and manage costs. Occupancy was one area that we focused on through a Strategic Facility Committee of our Board, and resulted in the consolidation of 12 facilities down to 9. This was made possible through the purchase of a suitable facility coupled with low cost financing by means of a PRI loan from MMT and a tax exempt loan through the SNAP bond program offered by the Oregon Facilities Authority.

The PRI loan process was much like applying for a loan from a commercial lender and MMT does equal due diligence. They will spend time getting to know what your organization’s mission is, who your leadership is, evaluating your stewardship of organizational resources and understanding your ability to repay the loan. I found none of this to be overly burdensome and the result is a further enhanced relationship with MMT and low cost financing for our project.

Another benefit is that terms and conditions of the loan, which are dictated in traditional financing, is worked out between you and MMT in a way that is tailored to your organization while at the same time prudent for MMT. This project, through consolidation of facilities and low cost financing resulted in significant savings to our organization.

From Nancy Yuill, Executive Director of Innovative Changes

Innovative Changes is a Community Development Financial Institution Loan Fund that helps low-income individuals and families, and those who otherwise lack adequate access to capital and/or financial services, manage short-term financial needs in order to achieve and maintain household stability. It was established in 2009 by Innovative Housing to be an alternative payday lender.

When Innovative Housing (IHI) set out to create an alternative payday loan company, requesting a PRI from Meyer to capitalize the loan fund made a lot of sense. We intended to revolve the funds and were seeking something that looked and felt like capital rather than a grant. Because MMT needed to ensure that we could repay the PRI funds, it requested more detailed financial information than is usually provided to grantors and reviewed our financials like a lender. This felt very familiar to IHI, as we work with more banks than foundations in our real estate development activities.

From the perspective of Innovative Changes (IC$) – the PRI was the first money in to the loan fund and was used to start up our small dollar lending program. Without it, IC$ would have had no working capital to prove our model and demonstrate that you can lend small amounts of money to poor people to help them overcome financial emergencies. Meyer Memorial Trust’s early investment in our start up provided us with comprehensive funder scrutiny that was helpful to our planning, enabled us to take calculated risks, and instilled credibility with other funders. We have subsequently been able to secure additional capital funds in the form of both loans and grants.

From Diane McWithey, Executive Director of Share

For many years, Share’s mission has served homeless and hungry residents of Clark County, Washington. But over the years, the growth of our organization outpaced the available space we had to adequately serve our clients.

In Oct. 2008, Share took the first step in its capital campaign with the purchase of the former Timber Lanes bowling alley. However, additional funds were needed to begin Phase 1 of the design and renovation process. Historically, more than 50% of Share’s budget came through federal and state resources, but many of those funding sources had been drastically reduced or eliminated during the recession. So, as part of a comprehensive plan to secure community funding, Share looked to Meyer Memorial Trust for a Program Related Investment project.

The PRI was beneficial in lowering the overall debt burden, allowing Share’s Capital Campaign Committee the necessary time to recruit and engage new donors to Share, ultimately raising all the funds needed to complete Phases 2 and 3. And in Feb. 2013, we were able to move into the new Share Fromhold Service Center.

MMTs PRI projects are a shining example of their commitment to investing in quality organizations and quality projects that benefit our entire community.

The project allowed VGMHC to refinance an existing debt related to the construction of our McMinnville Clinic. The PRI was very beneficial in lowering the overall debt burden of the organization, which freed up resources to invest back into programs and services for vulnerable people in the community.

As VGMHC considered the PRI as an option to address its strategic plan, it was very important to engage members of our board of directors, particularly the board’s finance committee. This was what truly differentiated the PRI process from a typical grant process, which is typically handled by our foundation. Usually, our board does not vote on whether to apply for a grant or not, but rather approves the annual funding plan. But in this case, the PRI acted more as a loan than a grant and so it required full board approval and due diligence to move forward.

We spent a few meetings educating our board on the PRI opportunity and its terms. We also worked much more as a team with our board members to produce the PRI request than we normally would with a grant proposal.

The board’s finance committee reviewed terms of the PRI, asked questions of the management staff and helped ensure that the PRI was a good fit for the organization. Based upon discussions with the finance committee, both our center and foundation staff worked with the program officer from MMT to craft the final terms of the PRI and successfully implement the program.

In the end, we had a team of core people that came from our board, our finance staff, foundation staff and executive team that were central to the partnership with Meyer Memorial Trust. It was a fantastic way to partner with a community organization to produce real results outside of a traditional grant structure.

From Betty Tamm, Executive Director of NeighborWorks Umpqua

NeighborWorks Umpqua is dedicated primarily to developing affordable housing in southwest Oregon. Our housing developments have complicated funding structures with a combination of grant funds, loans, tax credit equity and restricted funds from private, state and federal sources. The money is often awarded early but not distributed until construction is complete. This means we need construction loans to bridge until we receive the later funds.

We have obtained loans from conventional financial institutions but then we need to include money to pay the interest in our budget. Our current PRI is the second one we received from Meyer Memorial Trust. The first was for a major rehabilitation of the historic Hotel North Bend on the Oregon Coast. Our second PRI is for Eagle Landing to provide affordable housing for homeless veterans or veterans at risk of homelessness.

The lower interest cost of both PRIs created savings, which meant we could put more money into the project.

Because both projects were sizable, the PRI did not mean that there was no other loan. In fact, we obtained both a PRI and a conventional loan from a bank. However, both MMT and the bank were willing to work together and share in construction oversight and monitoring.

The due diligence required for PRI is similar to a bank loan, and very different from a grant, but it is not overwhelming. MMT’s staff will study the agency’s financials and project pro forma as a traditional lender would.

Entering into the PRI required our board of directors to approve a resolution and understand the repayment requirements. Consequently, it was imperative that the budget shows that the principle and interest could be repaid at the end of construction.

While the PRI does take more work, in the end it is a wonderful tool and a needed resource.